With Red Hat’s (RHT) fourth-quarter earnings beating estimates coming in at .22 per share vs Analysts estimates of .20 is now the time for Oracle (ORCL) to buy them up?
Jefferies & Co. analyst Katherine Egbert writes in a research note that “it would make sense” for Oracle to own Red Hat, which providers a popular variety of Linux, but that the timing doesn’t seem right. “Oracle’s high-profile foray into the Linux market, beginning in March 2003, has lead to much speculation since that Oracle would ultimately buy Red Hat, given the software giant’s history of organically entering new markets and driving the the perceived value of the incumbents before ultimately buying shares.”
Red Hat (RHT) has a dominant market position as the high-quality, low-cost provider of IT infrastructure solutions. Its balance sheet is growing even stronger with significantly higher operating cash flow than last quarter. Red Hat (RHT) and Microsoft (MSFT) have teamed up on a virtualization interoperability pact that’s a big deal for customers–especially the mixed source variety.
Red Hat traded up 10% after hours to $16.45 and Microsoft is currently trading at $17.88. I just don’t see Mr. Softy making any large gains in share price anytime soon. Red Hat provides value by helping Commercial and Government entities implement secure, viable systems for lower costs. Lower than overpriced solutions from another company which boasts of “innovation”.
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